Shuanghui Development (000895): The performance during the stress test period is stable and the annual performance of price increases is expected to appear

Event: The company released its 2019 Interim Report: 19H1 achieved total revenue of 254.

5.5 billion, previously +7.

26%; net profit attributable to mother 23.

8.2 billion, at least -0.

16%; deduct non-net profit 22.

31 ppm, +0 for ten years.

81%.

Among them, the total revenue of 19Q2 in a single quarter was 134.

81 ppm, +15 for ten years.

50%; net profit attributable to mother 11.

02 billion, a year-16.

58%; deduct non-net profit 10.

09 million yuan, at least -16.

11%.

Key points of investment slaughter: Q2 was affected by the increase in pig prices, and the volume and profit fell month-on-month, and the overall volume and profit in the first half of the year reached a new high.

19H1 income from slaughtering business was 150.

400 million, previously +7.

8%, of which external income is 127.

100 million, ten years +10.

1%.

Judging by the first volume and price, 19H1 slaughtered pigs 857.

790 thousand heads (+3.

7%), 74 fresh frozen products for export.

5 Gazette (-3.

0%), ton price 1.

710,000 yuan / ton (+13.

4%); single Q2 slaughtered 3.85 million pigs (-11.

6%), selling fresh frozen products 37.

7 bulletin (-6.

3%), ton price 1.

850,000 yuan / ton (+35.

5%).

Looking at 19Q2: 1) alone, pig prices rose rapidly to 15 due to the effects of African swine fever.

7 yuan / kg (+ 46%), the slaughtering volume is relatively difficult under the relative difficulty of collecting pigs, and the ratio is down from the previous month.

The sales volume of fresh frozen meat increased, mainly due to the increase in the reserve inventory of the internal sales of raw meat, and the ending inventory 72.

04 billion with a 76 increase.

At the same time, China and the United States have increased tariffs on imported frozen meat, and the amount of frozen meat has declined; 2) Revenue, due to rising meat prices, the average price of pork in Q2 22 provinces23.

5 yuan / kg increased by 36%, the total slaughter income end increased by 16.4% / export increased by 26.

9% trend growth; 3) profit, Q2 head net profit 75.

5 yuan increased by 26%. Although the chain price has dropped somewhat, the inter-provincial transportation policy in the swine fever epidemic still favors slaughter performance.

19H1: Amount slaughtered in Q1 (472.

70,000 heads increased by 21%) (average net profit of head 113).

4 yuan increased by 92%) In the case of historical highs, although Q2 volume and profit fell month-on-month, the first half of the year still achieved a new volume and profit.

Looking at the second half of the year, pig prices may continue to increase, and the slaughtering end will be under pressure to improve. However, the possibility of the industry crisis breeding, Shuanghui is expected to bring its own national layout, scale effects and cost advantages continue to increase market share.

Meat products: Q2 ton price increase pressure on the cost side pressure, look forward to price increases in the second half of the year to reduce costs and increase profits.

19H1 meat products income 119.

03 over ten percent.

2%.

According to preliminary volume and price, 19H1 exports 78 meat products.

4 nominal (flat), ton price 1.

520,000 yuan / ton (+4.

2%), operating margin of 16.

3% down 4.

1pct; Single Q2 export meat products 39.

9 Bulletin (-2.

1%), ton price 1.

520,000 yuan / ton (+6.

5%); operating margin of 16.

1% down by 5.

8 points.

In terms of segmentation, high-temperature meat products earned 76.

6.5 billion increased by 7.

52%, accounting for 64.

4%; low-temperature meat products income 42.

3.8 billion increased by -1.

3%, accounting for 35.

6%.

Volume: After the company’s price increase cycle started, the sales volume in the first half of the year was basically flat, which verified that the company’s leading companies had merged.

Pros: As the price of chicken and pigs doubles, Sino-U.S. Trade frictions (currently the meat price difference between China and the United States is about three times, but the import of some products under 62% tariffs are reduced), the profit of meat products is under pressure, and the operating profit margin Q2 continues Q1 continuesTime trend.

Price increase and cost reduction: 1) Price increase, 3 price increases in the second half of the results are expected to fully reflect.

2) Adjust the structure, and began to launch new high-priced products in the second half of last year, and continue to improve the proportion of high-quality, high-price, and high-profit products; 3) Reduce costs, including the use of spreads in slaughter areas, increased imports of meat, and optimized recipes; 4) Reduce fees, Promote intensive production, reduce the minimum operating expenses and improve operating levels, 19H1 management fee rate, the total sales rate fell slightly by 0.

06pct; Profit forecast and investment grade: In the case of swine fever, due to the change in the transportation mode, leading companies in the country have increased their profits in the short-term and integrated their industries in the short-term; in terms of meat products, the company currently has certain reserves and import channels for imported meatContinuous expansion. With the upgrading of the product structure and the promotion of marketing, 武汉夜生活网 the price increase strategy will be gradually reflected.

In terms of meat products, since the company made adjustments in R & D and sales, product price increases, marketing pulls, and innovations have already begun to emerge, and multiple measures to reduce costs have been introduced. We look forward to raising prices and increasing profits.

We expect the company’s revenue to reach 539/593/628 trillion in 19-21, an increase of 10%.

6/10.

0/5.

9%; net profit attributable to mothers was 5.35 / 59 / 6.3 billion, an increase of 8.8/9.

6/7.

9%; corresponding PE is 14/12 / 11X, as the company’s asset reorganization is still suspended, it is recommended to pay attention to relevant progress.

Risk warning: hog prices fluctuate, high-end product marketing is less than expected, channel development is not up to expectations, the risk of rising prices of raw materials such as chicken, and asset restructuring is less than expected.